Centralized IT Operations – The Disaster Ahead

Question: What happens if we centralize and automate IT operations?
Answer: We get bigger failures, and those failures have greater consequences.

Question: What happens if we don’t centralize and automate IT operations?
Answer: De-centralized systems are less susceptible to enterprise-wide disruption.

We can see this now. Sort of.

Ransomware attacks. Equifax. The City of Atlanta. Colonial Pipeline. SolarWinds. Kaseya.

But wait – how did this all start? Let’s take a look back to the origins of this mess.

In the beginning...

Companies began selling us on the idea of “the cloud” before we could actually spend our money on it. With star-filled eyes, the cloud evangelists told us the rapture was near, and heaven was being built. Soon and very soon! They painted a beautiful picture of a bright and glorious future. Work from anywhere! Start that report in the office, and finish it from a lounge chair on a sunny beach! Are you out on the golf course, and want to know the latest sales figures? Just look at your phone! Do you need stock alerts to know the best instant to buy and sell? Real time information is beeping on your Blackberry right now! You’ll make millions, while sitting in the stadium watching the kids play their favorite sports. You’ll be a good parent, a good spouse, a good worker, loads of free time, forever happy, and rich beyond your wildest imaginings.

“The cloud! Can you see it?”

Of course, we had questions. We had doubts. We raised objections.

Photo by Joshua Sortino on Unsplash

Objection #1: “How can it be cheaper for me to pay you to manage my servers? You’ve got to pay for real estate, electricity, data circuits, and employees to maintain it all, just like I would. Plus, on top of the normal expenses, you’ll be charging me a premium so you’ll make a profit. I should just do it myself and not pay your profit margin.”

The cloud evangelists replied: “It’ll be a shared cost. Shared servers, shared air conditioning, shared real estate, shared staff. You’ll only pay a fraction of what it would cost to pay all of the overhead yourself.”

And we believed them.

Objection #2: “But you’ll have access to our data. We can’t trust you not to peek. It’s not secure.”

The cloud evangelists replied: “All your data will be encrypted, and you’ll be the only one with the encryption keys.”

And we believed them.

Objection #3: “What if there’s a disaster in your data center? An earthquake? A fire?”

The cloud evangelists replied: “We’ll have carrier grade equipment and best practices. We’ll make backups. We’ll store copies of your data in multiple locations around the globe. Just like the Titanic, it can never fail.”

And we believed them.

And everything they said was true, but not the whole truth.

Cheaper? With metered pricing, no user in the company knows the total monthly cost, until the invoice arrives.
Question: Who said, “Holy $%&! We’ve got to get our monthly cloud expense under control!?”
Answer: Every business owner who has ever used the cloud.

Encrypted and private? Encryption melts away in the presence of authentication. Historically, authentication credentials are easier to obtain than we like to think. And there’s this little matter of revelations about the NSA by some guy named Ed. But it’s not just the USA; you can extrapolate those revelations to every nation-state with an interest in data.

Backups in multiple locations? Some of those locations turned out to be in countries with lax security, no privacy laws, or untrustworthy governments. To address these concerns, some countries have passed laws to define where and how information about its citizens can be stored, but auditing to verify compliance is difficult. A decree isn’t equivalent to reality.

None of this information is new. It’s all been said before. But large companies still embrace centralization of their IT operations. Why?

Data is a drug.

Because data is like crack cocaine, and the largest companies in the world are addicted to it. Today, corporations don’t centralize their data because it’s cheaper or more secure. They centralize their data to create new revenue streams by leveraging the power of big data. They don’t centralize their data to save money and reduce costs to you. They centralize their data so they can get more money from you. Oh, wait; there’s one part of the previous sentence that needs to be corrected.

It’s not their data. It’s your data.

Corporations are centralizing the storage of your data so they can leverage the information to get you to buy more – more stuff, more services, more audio and video content.

And it works. And that’s why they tolerate the insecurity created by storing data for everyone in the company (or in the world!) in one data center, instead of having each branch office maintain and store customer information locally.

There’s a better way. Consider insurance as an example.

The insurance industry used to be decentralized, but they changed their operating model to the more risky centralized model in order to profit from your information.

Consider your local auto insurance agent. They’re not just auto insurance any more. They’re now a multi-lines agent. They can sell you an auto policy, a homeowner’s policy, and life insurance. Maybe even a Medicare supplement. They offer an economic incentive, too. You get a discount when you bundle.

The local insurance agent used to have a wall of filing cabinets full of accounts. They may still have some filing cabinets, but they don’t fiddle with the paperwork so much anymore. The agent, or their Customer Service Representative (CSR), enters all of that information into the insurance company’s Database In The Cloud.

What happens when the insurance company’s Database In The Cloud is breached by cybercriminals? You know the answer. The cybercriminals have all of the sensitive information on millions of people: the drivers, the homeowners, the children – all of it.

 

Photo credit: elements from the insurance website

 

Now, compare that worst-case scenario to a criminal break-in at an insurance office before data centralization. How much sensitive information would the criminal get? In order to answer that question I did some research, and I discovered that the size of a local insurance agency varies widely. (As a sidenote, I also learned that there are a lot of unhappy insurance agents and ex-insurance agents posting in various insurance forums. In case you’re wondering, insurance agents work hard for their money). But back to our question: how big is a typical insurance office? There are big offices and small offices,  but for our example we’ll use a multi-line insurance agent with 2,000 policies. This could be a Farmers agent, or State Farm, and so on. How many households are represented by those 2,000 policies? Well, it’s a multi-line insurance agency, so some households have more than one of those 2,000 policies, so let’s say we’re talking about 1,500 households. Next question: how many people are in those 1,500 households? Some of the households are single people living in an apartment. Some of the households are families of six living in a big house. So, let’s say that the average household is composed of 4 people. Do the math and that gives us an insurance office with detailed information on about 6,000 people.

Even if the local insurance agent gives up filing cabinets and stores all of the customer information on a computer connected to the Internet, we’re still looking at a much safer scenario. A cybercriminal who breaches the agent’s office network will get the information of about 6,000 people – not 6 million.

“But, Bob – there’s no way the little insurance agent can have a network as secure as a sophisticated data center!”

I call B.S. on that one. Data centers are getting breached right and left. Hey, even if ten percent of the insurance agents used abc123 for their password, the decentralized data would still be more secure than it is today. And another thing – the insurance company can set standards for their agents’ networks, and enforce those standards through monitoring at the district level. So, no. The centralization of your data isn’t being done because it’s more secure. It’s being done because the collected data is a source of additional revenue. Your security and privacy are taking a back seat to corporations’ greed.

I’m not trying to pick on insurance companies. That was just an example that you’re sure to be familiar with. All the different types of companies that collect your data are doing everything they can to profit from your data. They market to you directly, and they sell your information to other marketers.

“But when they sell my information, don’t they anonymize it?” It doesn’t matter. The have your information, un-anonymized. And then they get breached. Your name, address, date of birth, Social Security number, credit card information – and that one password you’ve been using on every account since you were in the tenth grade – it’s all gone. Because they centralized the data on millions of customers, stored it all in one network, and that one network was compromised.

T-Mobile. Target. The Veteran’s Administration. All of them could have architected a network with decentralized data. But they centralized it, because it was for their benefit, not yours.

The big corporations claim, “By centralizing your data, we’re keeping our costs down, and we pass the savings along to you.” Translation: “We’re increasing unemployment by reducing our IT headcount.” And they don’t do it to pass the savings along to you; they do it so they can market to you, and get you to spend more. In other words, they’re reducing their costs, and increasing your spending.

Time to summarize.

What can we learn from the many recent, large scale data breaches? I’m glad you asked! We learn that centralization and automation of IT operations is an Achilles’ heel that brings two problems:

1) Failures have greater consequences.

2) Increased unemployment.

 

What happens if we don’t centralize and automate IT operations? I’m glad you asked!

1) De-centralized systems are less susceptible to enterprise-wide disruption.

2) We have a larger pool of entry-level IT talent from which to promote.

I’ll leave you with this question:

Which costs less: centralized/automated, or decentralized/human driven?

A lot of people thought this question had an easy answer.

Does it?

 

--Bob Young
FIFO Networks

Need help with your network or cybersecurity? Contact FIFO Networks (link below). Available by the hour, week, month, project... Let’s talk.

Wireless – Telecom – VoIP – Networks – Cybersecurity – Remote or Onsite

 

Back to Articles List

Home

Contact

 

.